Business journalists can find plenty of stories by exploring the transformative impact of artificial intelligence (AI) tools on the financial sector. AI is playing a transformative role in enhancing customer service, changing the skills needed in financial industry jobs, improving risk management and helping people manage their money and investments.
In what ways are AI tools enhancing customer service?
As chatbots provide 24/7 assistance, bank customers gain a convenient self-service option, accessing information quickly about transactions, balances, and other banking processes. Deploying chatbots to respond to basic inquiries, however, no longer suffices as consumers demand more personalized and innovative communication.
Bank of America was one of the first to create an AI-driven chatbot when it pioneered Erica. With over 1.5 billion interactions since 2018, Erica assisted customers with tasks like balancing checks and transferring money. It now functions as a virtual financial assistant — monitoring subscriptions, creating budgets and sending alerts about credit score changes.
A recent survey indicates 48% of US bank executives plan to enhance interactive chatbots and virtual assistants with generative AI for advanced customer use. In a competitive market, banks leverage AI to differentiate themselves from other banks, to optimize services and provide better conversational and personalized experiences.
Story idea: Do a roundup of three local banks in your area. Investigate which AI customer service tools they each use and how do their customers benefit from each? Ask what it means for bank employees — will there be layoffs?
Are employees trained on AI skills?
AvidXchange, a provider of accounts-payable automation software, surveyed 500 finance executives about their top priorities for 2024. Findings show 72% of finance departments are already utilizing AI and 49% of these executives emphasized the importance of upskilling their finance employees. About 28% are implementing mentorship programs. While training on how to use AI is crucial, executives also prioritized ensuring staff use technology efficiently and safely.
Michael Abbott, Senior Managing Director and global head of Accenture’s Banking industry group, highlighted the importance of not only using AI, but integrating AI effectively. He stated that success hinges upon the human plus machine and “on strategy as much as implementation.”
But with the rapid pace of technological change, many company leaders are hard-pressed to keep pace with training their employees. A survey by Boston Consulting Group of 13,000 workers across 18 countries found that 85% believe they will require new AI training, yet less than 15% have received it.
PricewaterhouseCoopers (PwC), servicing 87% of the world’s Fortune 500 companies in accounting, auditing, business consulting, tax advisory and related services, launched an AI training program for its 75,000 employees in summer 2023, with courses on AI ethics, responsible technology use, and optimizing AI tools for optimal results.
Story idea: JP Morgan Chase was named a leading global bank in the financial sector for commercial AI adoption, but many other institutions are rolling out training programs for their employees. What are the AI skills employers are looking for in new hires?
How is AI improving risk management?
In the realm of risk management, AI-driven advancements in cybersecurity help financial institutions defend against breaches and cyberattacks. With new capabilities in threat monitoring, banks can better determine which incidents demand human intervention. AI is poised to play a crucial role in breach detection and response.
Banks are also leveraging AI to combat financial fraud, such as credit card theft and money laundering. By replacing rules-based detection methods that are prone to false positives with cutting-edge AI, institutions can proactively identify patterns and anomalies, shifting from a traditional reactive approach to a preventative one in fraud detection.
Story idea: Explore the balance between security and privacy with AI. Investigate how AI safeguards financial data while navigating privacy concerns. Research data privacy regulations and compliance. Engage privacy advocates to discuss risks and solutions for protecting our privacy amidst AI integration.
Are consumers embracing AI for money management and investment?
Consumers are increasingly turning to AI for money management and investment decisions. While finances were long considered personal, and people relied on advice from trusted advisors, 40% of Americans believe Generative AI to be a useful tool for managing finances, according to a survey by Intuit Credit Karma.
AI now assists portfolio managers in optimizing asset allocation and making real-time adjustments based on market conditions and client preferences. Robo-advisers automate investment decisions, creating competition for old-school financial advisory firms.
Matthew Tuttle, the CEO and CIO of Tuttle Capital Management, an investment expert who appears regularly on CNBC and Fox Business News sees considerable potential for AI, but says the tools still need more work. He believes the most powerful way to use AI is to learn from it and get better with money management and investing strategies. “You can run different strategies through AI and it can tell you the weak spots, areas of improvement, etc. It has all of the investing knowledge out there at its ‘fingertips’ and is way easier to use than research through a search engine.”
He’s skeptical, though, about AI actually investing for you. He said, “I have seen some interesting results, but I am dubious at the current time. In the future though, you could see AI replace money managers.”
Story idea: Explore the rising trend of AI in investing. Examine specific AI investment tools and consult with portfolio managers and fintech company leaders to predict market trends.
